CLEVELAND, Ohio - The housing market in downtown Cleveland and the city's near-West Side is getting healthier with limited government intervention. The same can't be said for much of the East Side, where economic transformation driven by health care, education and research isn't translating into higher home values and a deeper neighborhood workforce - yet.

In a study released Wednesday at a news conference about Mayor Frank Jackson's new neighborhood initiative, researchers from Cleveland State University argue that the city should focus its neighborhood-development spending on a broad swath of the East Side, stretching from East 55th Street to the edge of University Circle and encompassing distressed but promising areas including Fairfax and parts of Glenville, Hough and Buckeye.

To accelerate real estate appreciation, the study argues, the city ought to find the pinch points between emerging markets - places where private investment is flowing - and give them a boost. And it's early enough that Cleveland has a chance to craft a strategy that supports both newcomers and existing residents, creating opportunity without leaving anyone behind.

A map shows the target investment area that researchers at Cleveland State University identified as a strong candidate for public investment in housing and economic development. The coloring reflects real estate appreciation pushing in from the edges, including University Circle to the east.Cleveland State University

The mayor commissioned the study, a $50,000 investment, last year to help guide the city's decision about where to spend $25 million earmarked for neighborhoods. On Wednesday, Jackson announced that the public money will be joined with roughly $40 million in philanthropic and private funds in an effort to reinvigorate parts of the city that haven't benefited much - if at all - from Cleveland's economic recovery.

The Jackson administration received a draft of CSU's report at least six months ago but wouldn't release the findings until details of the public-private development plan were hammered out.

"It's taken a long time because I want to do it right," Jackson said during an interview Wednesday after the news conference at the Doan Classroom Apartments on East 105th Street, an affordable senior-housing project that the city helped finance years ago. "I'm not trying to make political hay. I'm not trying to say something and move on ... I never announce anything until it's ready to go."

Housing, employment markets are disconnected

The mayor, up for re-election this year, is facing challengers who argue that downtown Cleveland's gains have come at the expense of other city neighborhoods. The findings from CSU paint a more nuanced picture of the city's housing market, where real estate appreciation is occurring in Tremont and Ohio City on the near-West Side, downtown in the middle and University Circle to the east.

But the study shows a striking disconnect between employment growth and home-value gains.

Researchers from Cleveland State University highlighted a disconnect between job gains on Cleveland's East Side and housing growth to the west.Cleveland State University

The hiring is happening on the East Side, which added nearly 22,500 jobs from 2002 to 2014 - a period when employment fell across the rest of the city and the region.

But the housing appreciation is occurring on the West Side, which wasn't as hard-hit during the recession and which is luring lenders, builders and buyers interested in more urban, walkable, mixed-use neighborhoods.

Jackson's legislative initiative will focus on housing, economic development and broader quality of life issues, layering new, targeted tools on top of the existing array of programs the city already offers. Cleveland City Council is considering legislation to support the effort, and the administration hopes to solicit proposals for housing, economic-development and entrepreneurship projects soon.

It's possible that some of the $65 million will flow to the Clark-Fulton neighborhood on Cleveland's West Side, anchored by MetroHealth Medical Center and bookended by development in Tremont, Ohio City and Detroit Shoreway. On Wednesday, the mayor acknowledged that the investment areas could shift slightly as the program evolves. But the emphasis in the CSU report and during the news conference swung heavily toward the East Side.

"We want to focus on the fringes. That's what this is about," Freddy Collier, the city's planning director, said during an interview after the event.

The heart of CSU's recommended target area is East 105th Street and Cedar Avenue. That's the northern terminus of the Opportunity Corridor road project and the site for a planned office building for IBM, which is expanding its footprint in Cleveland after acquiring a local healthcare data analytics company called Explorys. A broader campus could emerge around the IBM project, which is being developed on land owned by the Cleveland Clinic.

The Cedar-105th intersection illustrates Cleveland's quest for economic change, from old-guard manufacturing to medical jobs and from a shrinking city to a place with growth potential, said Richey Piiparinen, a senior research associate at the Center for Population Dynamics and the lead author of the CSU study.

"The block acts as a gateway into the globalization of Cleveland proper," he wrote in the 25-page report, "that has the potential to do to the Fairfax neighborhood what Google's arrival in Pittsburgh did to the neighborhood of East Liberty."

He argues that Cleveland has the chance to dictate growth terms in the surrounding neighborhoods - and a shot at encouraging balanced development that serves both highly-paid and lower-income residents and workers.

Of course, such an effort might face hurdles. The East Side target zone outlined in the study spans multiple Cleveland City Council wards. It involves territory covered by a handful of community development nonprofits, some of them robust and others less effective. And it remains to be seen whether the city, foundations and banks are setting aside enough money to create a market where there's little activity today.

"The goal here is, ultimately, some equitable economic development," said Kyle Fee, a regional community development advisor at the Cleveland Fed and a contributor to the CSU report. "You're going to want to get in on the ground floor by putting in those policies before turning into a San Francisco or New York or something like that. ... Maintaining a mixed-income, mixed-use framework is important."

A map produced by the Federal Reserve Bank of Cleveland shows the dominant group in each of Cleveland's neighborhoods in 1970.Cleveland Fed; CSU

But Fee found, in a report published by the Fed earlier this year, that the city's neighborhoods actually didn't change much. In terms of neighborhood demographics - white, black, low-income and high, renter and homeowner - Cleveland has been less malleable than Pittsburgh, Columbus or Cincinnati, according to Fee's research.

A 2010 version of the same map shows the dominant groups living in each of the city's neighborhoods 40 years later.Cleveland Fed; CSU

Those findings served as a foundation for the CSU report, which detailed more recent growth trends and identified a window of opportunity for the public sector to guide development. The combined research sheds light on how far the city still has to go after decades of decline and the brutal recession of 2007 to 2009. And it alludes to some strategies for success.

But concerns about affordable housing for first-time buyers and blue-collar workers are bubbling up west of downtown. Neighborhood groups across the city are exploring strategies for rehabilitation projects that might help to fill the gap between cheap fixer-uppers and much costlier brand-new homes.

A more robust - and diverse - housing market is key not only to Cleveland's long-term health but also to Cuyahoga County's tax base.

CSU researchers found that 94 percent of the residential properties in Cuyahoga County have lost value - based on market values established by the Cuyahoga County Fiscal Office - since 2009. Only 6 percent of residential parcels are up in value, and many of them are in or near downtown Cleveland and University Circle.

In Tremont, just west of downtown, nearly 18 percent of residential parcels have grown in value by at least 50 percent over the last eight years. Across the county, fewer than 1 percent of all residential parcels experienced similar appreciation during the same period, according to CSU's analysis.

"There's been a lot of groundwork and foundational work on the near-west side to set those areas up for growth. And now we're at the point when we're trying to do it for the east side," Fee said, adding that thoughtful development strategies will consider both housing and jobs - rather than focusing on one type of investment and neglecting the other.

Piiparinen views the neighborhoods around the Cleveland Clinic and the Health-Tech Corridor, which runs several blocks north and south from Euclid Avenue, as a logical place to invest public money in hopes that private dollars will follow. Major employers and institutions can be bulwarks for growth. Real estate appreciation is moving in that direction from the Health-Tech Corridor and University Circle.

A heat map of the Health-Tech Corridor in Cleveland shows real estate appreciation approaching from either end - downtown to the west and University Circle to the east.Cleveland State University

And there's a chance to maintain and build on diversity in those neighborhoods, through investing in a range of housing for people who work in the city, pursuing tax credits to build more affordable-housing projects and providing low-cost loans for existing homeowners to fix up their properties.

Researchers at CSU are working on a separate study, not funded by the city, to craft a job-growth strategy tied to life sciences and healthcare data in the area.

The crux of the emerging-markets study is that Fairfax and nearby neighborhoods have the opportune mix of distress and potential. The engines for improvement are there, but they need revving up. And they need strong, even hands at the wheel.

As if anticipating arguments that the city should scatter its $25 million more broadly, the researchers included one cautionary note: "Putting limited public funds in parts of the city that are not yet strategically positioned could lead to squandered, if well-intentioned, investment."